Budget 2027 Ireland: Key points for employers and payroll processors

Budget 2027, announced on the 6th of October 2026, raises the minimum wage to €14.94 an hour from the 1st of January 2027 and increases the standard rate band, key tax credits, the USC 2% band ceiling and the employer PRSI threshold. Income tax rates stay at 20% and 40%.

Which Budget 2027 changes affect employers and payroll?

Multiple measures were announced for payroll.

What is the new National Minimum Wage rate?

The National Minimum Wage rises by 79 cent to €14.94 an hour from the 1st of January 2027. Employees paid at or close to the minimum are the ones most likely to be affected. The USC change below was set in line with this increase.

Do income tax rates or bands change in 2027?

Rates do not change, but bands do. Income tax rates stay at 20% and 40%. The standard rate tax band, which is the amount a person can earn before paying the higher rate, increases by €2,500 to €46,500 for a single person. Married couples and civil partners receive proportionate increases.

Which tax credits increase?

Three credits each increase by €125 to €2,125:

• Personal Tax Credit

• Employee Tax Credit

• Earned Income Tax Credit

These are due to increase in 2027 with no exact date confirmed.

What happens to the USC 2% band?

The ceiling of the 2% USC band rises by €1,600, from €28,700 to €30,300. This is in line with the minimum wage increase from the 1st of January 2027, and it means full-time employees on the minimum wage stay out of the 3% band.

What changes for employer PRSI?

The employer PRSI threshold increases from €552 to €600 in 2027.

When do the Budget 2027 changes take effect, and could they change?

It depends on the measure. Some changes are to be implemented sooner than others, with many to be finalised before they take effect. Treat every figure in this guide as announced only rather than final figures. The full list of Budget measures is on the Citizens Information and gov.ie.

What should employers, accountants and payroll bureaus look for in payroll software for 2027?

Look for software that automatically applies Budget changes as Revenue directs. BrightPay, Bright’s fully cloud payroll software, does exactly this.

When tax rates, thresholds and other payroll rules change, software that relies on manual updates leaves your team to find the new figures and put them in place. Cloud payroll software that updates automatically, with nothing to install by hand, keeps you in step with the latest tax rates and legislation. For employers, accountants and payroll bureaus, that means less time chasing changes and fewer chances of running payroll on out-of-date rules.

After you’ve got automatic compliance updates, then look for a software that offers more flexibility. Cloud-based payroll software, such as BrightPay, can be accessed from any device, once you’re connected to the internet. So, you’re not tied to one office or just one desktop. Payroll fits around you, not the other way round.

Finally, after you’ve got automatic compliance updates and more flexibility, then check that the payroll software you have supports multiple users. Luckily, BrightPay Cloud does exactly this. In the cloud payroll software, updates to a payroll file are visible to every logged-in user who has access and is working on that file straight away, so the team is always working on the most up-to-date version current version of the file. Changes can be made whenever they’re needed, wherever people are working from.

Ready to learn more about BrightPay’s cloud payroll software? Book a demo below.

This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.